Due to the new mortgage rules and adjustment done by the government of recent, one of the country’s major mortgage lenders commented on the situation saying, it will greatly impact on an area of its lending as a firm.
According to Home Capital, the new regulations will make it extremely hard for the low-ratio insured mortgage that is dependent on the government to be profitable and funded, mostly for those concentrating on the “Accelerator” program for property rental.
The Chief Executive Office and President of Home Capital, Martin Reid said; “Like all mortgage lenders, we are still assessing the full impact of the changes on borrower behavior and the competitive landscape.”
Because of the changes to the rules, the lender predicts that their Accelerator starts could decrease by as much as 60 per cent, on the other hand, its profit won’t be affected as the margin of the accelerator program is already at a low level.
Reid ended by saying; “As the effects become clearer, we will explore new business opportunities created by this shift. We believe that Home Capital’s solid fundamentals, strong balance sheet, and nimble, entrepreneurial strategy leave us well positioned to take advantage of any opportunities that result.”